Hung parliament

An important meeting of Lib Dem MPs last night. Opinion has hardened in a number of areas:

Vince made his first intervention– in favour of the Tories So far Cable has kept his powder dry. He’s a former Labour man. But last night he acknowledged that those arguing for a Tory deal were probably right. (There was a wise crack about feeling he was being “set up” to wield the public spending axe.) As a senior figure representing the old-SDP wing, this is a significant development.

Labour need to make a much better offer There was some surprise at both the tenor and the substance of the negotiations with Labour. While Mandelson and Adonis seemed mustard keen on a deal, the others, particularly Balls and Miliband, showed much less enthusiasm. Whether on electoral reform or policy, the first formal meeting suggested they were well short of the Lib Dem policy shopping list. Danny Alexander and David Laws both conveyed this message to the meeting. The MPs demanded to hear if the other two negotiators agreed — and they did. Today’s Labour meeting will be crucial but there is a mountain to climb.

Opinion hardened towards backing a Tory deal There are powerful and senior figures in the party singing the praises of a Lib-Lab deal. It is a faction — including all the former leaders — that can’t quite resist the opportunity to realise Jo Grimond’s dream of a uniting Britain’s progressive forces. But the younger generation are less convinced. All of them would be more comfortable with a Labour deal. But there are worries about legitimacy, about Labour’s ability to deliver, about the good faith of Labour’s Medusa-like leadership. The middle ground is to explore all avenues with Labour. But the mood is with a Tory deal. Read more

Strange as it seems, one of the easiest concessions the Lib Dems won from the Tories was a guarantee on the length of a parliament. The reason is that David Cameron is as worried about a snap election as Nick Clegg.

This is a prize the Lib Dems have sought for decades. It puts hung parliaments on a more stable footing by taking away the right of a prime minister to suddenly call an election, just when his junior partner is crashing in the polls. Read more

In Westminster there’s rightly been a lot of focus on policy. But the terms of co-operation are often as difficult to negotiate. From the NZ examples, it’s possible to sketch out some of the key elements underpinning a deal. (Warning: this is one for the legal scholars.)

1. A clause on “good faith and no surprises” These politicians trust one another. They really do. Read more

There are three broad models for a deal, which is looking ever more likely.

A full coalition: A clutch of cabinet posts for the Lib Dems. Collective responsibility. A multi-year legislative agenda and a complex arrangements for co-operating in government, resolving disputes, sharing information, developing policy. Cameron wins stable backing for a full term, take bulk of credit while sharing fallout from unpopular decisions. Both leaders face possible uprising from activists. Lib Dems struggle to maintain distinctive identity. The least likely option. Read more

It basically prevents a Lib Dem leader from forming a coalition without the consent of a clear majority of his MPs and activists. It is one more time consuming hurdle for the hung parliament dealmakers. Read more

There are some good reasons why no politician would be able to deliver electoral reform in this parliament, even if they wanted to. These five points should be a reality check for all those dreaming of an electoral reform pact:

1) Winning the referendumis by no means certain According to the latest polls, reform is supported by around 46 per cent. But I’d expect that the 37 per cent who oppose it may find it easier to convince a majority to stick with Britain’s “ancient” first past the post system. Pity the politician who is asked to sell the D’Hondt formula for calculating seats under PR. Read more

Last night’s Question Time ended on an extraordinary note. The public are more in favour of a hung parliament than the Tories care to admit. But I never expected an audience to heckle and boo Liam Fox when he warned of an indecisive election result triggering a run on sterling.

Peter Kellner of YouGov has an excellent piece in the Sunday Times looking at polling in marginals Before Clegg (BC) and After the Debate (AD). It overturns another big election assumption: that the Tories will perform better in marginals.

He uses a combined sample of 10,000 from past YouGov polls to examine the 115 Lab-Con marginals that should turn blue with a swing of eight per cent. Read more

There was a big move overnight against the Tories in the betting markets. A hung parliament is now the most likely outcome of the election, according to punters on Betfair, the online betting exchange. The odds at midday on Saturday are:

National Insurance: 46 per cent back Tory plans to reverse National Insurance rise. But, if a tax has to go up, 55 per cent prefer to raise National Insurance rather than VAT (YouGov/Sunday Times)

Marriage tax break: 19 per cent are more likely to vote Tory because of marriage tax break (YouGov/Sunday Times). But 59 per cent think the tax break should go to unmarried couples too (ICM Sun/Telegraph) Read more

Just picked up a first edition of The Observer and it’s leading with Nick Clegg warning that Britain faces “serious social strife” if a government without a popular mandate starts wielding the public spending axe.

It’s certainly a novel twist on the standard arguments about a hung parliament. Clegg’s pitch is basically that a minority government would be good for the country because it better represents the split of the popular vote.

A narrow victory for the Tories or Labour would wreak havoc because they would be sacking public sector workers, slashing programmes and freezing wages after having secured as little as a quarter of eligible votes. Read more

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FT journalists live blog during key events as the UK prepares to leave the European Union

The authors

Jim Pickard is the FT's chief political correspondent, having joined the lobby team in January 2008. He has been at the FT since 1999 as a regional correspondent, assistant UK news editor and property correspondent.

Kate Allen is a political correspondent for the FT. She joined the lobby team in October 2015, after two years as the FT's property correspondent. She previously spent a decade covering housing on various business magazines.